Deck 13: Operations Management

Question 1

Capacity planning involves determining how much of a product or service a firm should be able to produce.

Answer 1

True

Question 2

Managers use the economic order quantity (EOQ)model to minimize total inventory costs.

Answer 2

True

Question 3

Total quality management (TQM)encompasses a commitment from employees at all levels to continually strive to make improvements and satisfy customers.

Answer 3

True

Question 4

The fundamental notion of process reengineering is that form influences function.

Question 5

Operations management is purely a specialized function,without organizational or strategic importance.

Question 6

The tools and techniques of operations management do not apply to service firms or service activities.

Question 7

The Six Sigma approach mainly focuses on hitting a target average for eliminating defects and enhancing quality.

Question 8

Capacity planning for operations managers is a routine activity with little risk.

Question 9

Just-in-time (JIT)systems are used to manage and control inventory systems in order to ensure the timely delivery of products or services and all related inputs.

Question 10

The ABC analysis model helps managers decide when to order a product and how much of it to order.

Question 11

The term operations management is used to describe the activities related to producing both products and services.

Question 12

Statistical process control is a TQM employee empowerment tool.

Question 13

A popular definition of quality is "fitness for use," which is a measure of how well a product or service performs its intended purpose.

Question 14

A materials requirement planning (MRP)system produces schedules that identify raw materials,parts,and assemblies needed during specified time periods.

Question 15

Total quality management (TQM)requires the use of a separate team of experts to inspect products or services for defects or errors after completion.

Question 16

TQM uses only quantitative methods to promote "quality at the source."

Question 17

In today's business world,most companies plan on carrying excess inventory in order to meet unexpected upswings in consumer demand.

Question 18

Continuous process improvement in an organization involves both incremental and breakthrough improvements in the way it does business.

Question 19

Most organizations should operate at maximum capacity at all times.

Question 20

TQM emphasizes "quality at the source," that is,quality inspection at all stages of production or service output.

Question 21

A JIT system works best for organizations that make customized,one-of-a-kind products or services.

Question 22

The fundamental notion of process reengineering is that ________.

A) function influences form
B) form influences function
C) form and function exist independently
D) form and function are irrelevant to the process

Question 23

Which of the following is true of TQM?

A) It is not a part of any organizational culture.
B) It requires only the managers of an organization to commit to it.
C) It uses both quantitative and nonquantitative techniques.
D) It checks for quality control post-production.

Question 24

The "critical path" through a network of activities represents the shortest time path for the project.

Question 25

The TQM concept of "quality at the source" involves ________.

A) cost controls and statistical analysis
B) computer-aided design and work standardization
C) capacity planning and operational protraction
D) quantitative techniques and employee empowerment

Question 26

________ is a quantitative tool to aid in making decisions concerning how well a process is performing.

A) Employee empowerment
B) Statistical process control
C) Total quantity management
D) Electronic data interchange

Question 27

The term ________ refers to the incremental and breakthrough improvements in the way an organization does business.

A) computer-aided engineering
B) electronic data interchange
C) statistical process control
D) continuous process improvement

Question 28

As the complexity of managing supply chains has increased,its potential strategic importance has decreased.

Question 29

________ is a disciplined,data-driven approach for eliminating defects and enhancing quality,with an orientation toward the impact such improvements will have on the customer.

A) Six Sigma
B) ABC analysis
C) PERT analysis
D) CAD/CAM

Question 30

________ is a specialized field of management associated with the conversion or transformation of resources into products and services.

A) Strategic management
B) Operations management
C) Production management
D) Supply-chain management

Question 31

The supply chain refers to the coordinated system of resources,information,activities,people,and organizations involved in moving a product or service from raw materials to components and into a finished product or service delivered to the end customer.

Question 32

Which of the following is true of operations managers?

A) Their objectives have no direct cost implications.
B) They use a single technique to ensure timely delivery.
C) They are in charge of product quantity not quality.
D) They perform their duties while minimizing costs.

Question 33

________ is a management philosophy that involves a commitment from all levels of employees to continually strive to make improvements and satisfy customers.

A) Capacity planning
B) Total quality management
C) Statistical process control
D) Just-in-time systemization

Question 34

Productivity is a measurement of how well an organization is using its resources to produce goods and services.

Question 35

Which of the elements of continuous process improvement examines the critical sequences and seeks to maximize the objective.

A) design
B) objectives
C) capabilities
D) metrics

Question 36

Gantt charts are mathematical representations of projects.

Question 37

Which of the following statements is true of the quality of a product?

A) Quality consists of both efficiency and effectiveness.
B) Quality is not related to reliability.
C) Quality definitions are different for products and services.
D) Quality enhancements affect future, not current, revenues.

Question 38

Top executives at McCain Ericsson Bank have taken up business process reengineering to improve the standards of the organization.They are unsure if their current loan application process is an adequate measure of determining whether or not a loan should be given to an individual.Which of the following elements are they considering?

A) objective
B) design
C) capabilities
D) infrastructure

Question 39

Gantt charts and PERT/CPM tools perform identical functions.

Question 40

The total quality management philosophy emphasizes that ________.

A) separate teams of experts should inspect products or services for defects or errors after completion
B) empowered employees will take responsibility for their individual output as well as that of the whole organization
C) operations management is a specialized function without organizational or strategic importance
D) organizations should operate at the maximum capacities at all times

Question 41

The profits of Dunkin' Donuts are down by a quarter.The management believes this is because of the high cost of the raw materials being used.Matt,the operations manager,should use the ________ model so that total inventory costs are minimized.

A) DLC
B) EOQ
C) IQA
D) TPM

Question 42

The ________ is the maximum capacity at which a facility can run under ideal conditions.

A) design capacity
B) effective capacity
C) optimal capacity
D) supply capacity

Question 43

A(n)________ is a nonmathematical graphical representation of projects used by managers to help monitor the progress of projects.

A) ABC analysis
B) Gantt chart
C) EOQ system
D) JIT system

Question 44

Production of Sliver's latest small car,the Beetle,has been a dramatic improvement compared to its previous product,Quiver.The production target of 2,000 Beetle cars per day has been reached only within 10 weeks since the launch date,which was less than the time they needed for Quiver.Which of the following,if true,would suggest that Sliver adopted a JIT strategy for the Beetle?

A) Sliver acquired one of its major distributors before the production of the Beetle.
B) Sliver has recently made a substantial investment in acquiring warehouses close to its production facilities.
C) Sliver acquired a fleet of airplanes to ensure that all the components it sourced from across the world were unaffected by supply bottlenecks in other countries.
D) All of Sliver's production factories have their own purchase departments that help the company achieve benefits of scale discounting.

Question 45

Blue Springs is a company that produces bottled water.It has received a huge order to supply water for a five-day convention that is taking place in the city.There are about half a million guests expected to attend each day.The company must operate at its ________ to meet this demand.

A) optimal capacity
B) effective capacity
C) supply capacity
D) design capacity

Question 46

What are stock outs?

A) carrying of excess inventories that increase holding costs and therefore total costs
B) not getting products and services to customers when they want them
C) guarantee of product quality and quantity together with timely delivery
D) It is a term that refers to goods that have never been purchased by a customer.

Question 47

Managers use capacity planning to ________.

A) ensure that total inventory costs are minimized
B) make decisions concerning how well a process is performing
C) categorize items to produce a list of items that require the most control
D) determine how much of a product or service a firm should be able to produce

Question 48

________ is a system of getting the right materials to the right place at the right time.

A) Flexible manufacturing
B) Total quality management
C) Computer-assisted delivery
D) Materials requirement planning

Question 49

The PERT/CPM technique requires the project manager to determine ________.

A) the most economical quantity of products to order
B) which activities must precede others and which must follow
C) timely delivery of a product or service and related inputs
D) how to minimize total inventory costs

Question 50

________ is the percent of design capacity a facility is actually expected to maintain.

A) Expected capacity
B) Effective capacity
C) Projected capacity
D) Extended capacity

Question 51

Typically,the ________ would be the most useful tools for scheduling,monitoring,and controlling the timing of a bridge construction.

A) ABC/EOQ models
B) CAD/CAE approaches
C) PERT/CPM techniques
D) TQM and CPI programs

Question 52

Sandra,the operations manager of the Zara clothing chain,is informed that the summer line requires certain materials that are not available locally.She recalls having used the same raw materials two summers ago from a niche supplier.Which of the following should she use to solve this issue?

A) MRP
B) TQM
C) EOQ
D) RFP

Question 53

Which of the following is as costly as having excess unused inventory?

A) not being able to reach products to customers when required
B) holding parts in a static industry
C) holding just enough inventory for adequate supply
D) not having enough storage space for inventory

Question 54

Retail managers can use ________ to determine which inventory items require the most attention.

A) EOQ modeling
B) CSI factoring
C) ABC analysis
D) LIFO analysis

Question 55

Holding parts in dynamic industries ________.

A) is best because the parts do not depreciate in value
B) does not just increase holding cost but has to be written off
C) causes many companies to incur increased profits
D) does not make any difference to the industry

Question 56

________ refer to inventory management and control systems that ensure the timely delivery of a product or service and related inputs.

A) Just-in-time systems
B) Supply-chain systems
C) Continuous improvement mechanisms
D) Statistical process control techniques

Question 57

Since the two major costs of a company,annual carrying costs and ________,vary inversely,there are always tradeoffs to make.

A) overhead costs
B) holding costs
C) variable costs
D) ordering costs

Question 58

Dr.Magorium's Toy Co.managers hold a meeting every July to decide on the Christmas season offerings to be made that year in order to make good revenues for the organization.Which of the following scenarios best parallels this?

A) A manager in a chemical plant is in the process of deciding whether there is need for another new ethanol-refining machine or whether he can meet the demand with existing ones.
B) A hotdog seller calculates how many buns he must buy as the next day he plans to be outside the Superbowl stadium.
C) A university decides to discontinue a philosophy course due to lack of students signing up for it.
D) A Hollywood producer promotes his latest action feature with emphasis on areas where action films traditionally do well.

Question 59

Which of the following is an advantage of using the EOQ model?

A) helps managers make decisions about when and how much of a product to order
B) improving productivity and quality by reducing labor and equipment time
C) provides information about which inventory items require the most attention
D) increasing customer satisfaction by decreasing the time required to make and deliver the product or service

Question 60

Which of the following is true of firms that implement a MRP system?

A) They can often increase their inventory.
B) They are not efficient in responding to customer demands.
C) They can price their products competitively.
D) They use TQM as a subapproach to MRP.

Question 61

________ is the measure of how well an organization is using its resources (inputs)to produce goods and services (outputs).

A) Profit
B) Turnover
C) Productivity
D) Work standardization

Question 62

Which of the following leads to cost reduction?

A) productivity
B) excess inventory
C) customer satisfaction
D) high demand

Question 63

Which of the following is true of time and motion studies?

A) It does not involve reviewing any activity done in the organization.
B) It is less accurate than work sampling techniques as a method to determine time standards.
C) It follows the motto of working smart but not hard.
D) It is a popular way of determining the percentage of time spent on each activity during a working day.

Question 64

Orange County Choppers (OCC)is a production motorcycle manufacturer based in Orange County.Orange County Choppers has garnered worldwide praise and recognition for their custom motorcycles.Which of the following production processes do they use?

A) small batch
B) job shop
C) assembly line
D) continuous flow

Question 65

The ________ allows a company to capture the highest economies of scale.

A) job shop production process
B) small batch production process
C) assembly-line production process
D) continuous flow production process

Question 66

Scott Refinery,based in Washington,processes approximately three hundred thousand barrels of crude oil a day.Which production process does it follow?

A) job shops
B) continuous flow production
C) small batch processes
D) assembly-line processes

Question 67

Economies of scale occur when the per-unit cost of production falls as a firm's output increases.How is this commonly achieved?

A) when the company suffers from a dip in the demand for its products or services
B) when the company has certain fixed costs that do not change with the rise or fall in units produced
C) when the company has a predetermined order of tasks to be completed
D) when the managers of a company have an autocratic approach to leadership

Question 68

Hot Oven Bakery has an order for 1000 boxes of chocolate chip cookies from Shoprite supermarkets.They also have an order for 300 boxes of gingersnaps.Which of the production processes is Hot Oven Bakery most likely to follow?

A) continuous flow production
B) small batch processes
C) job shops
D) assembly-line processes

Question 69

Lotus Cars uses a manufacturing process in which individual steps in the assembly of the product are carried out by workers or machines as the product is moved along.Which manufacturing process is Lotus Cars using?

A) continuous flow production
B) assembly-line processes
C) job shops
D) small batch processes

Question 70

________ are commonly used for setting standards for repetitive,well-defined jobs.

A) Just-in-time systems
B) Time and motion studies
C) Work sampling techniques
D) Critical path methodologies

Question 71

________ are achieved when the per-unit allocation of fixed costs and,therefore,the total cost per unit go down as more units are produced.

A) Economies of scale
B) Econometrics
C) Quality installments
D) Utilization increments

Question 72

A ________ is the amount of time it takes a trained employee to complete a specific activity or process.

A) unit of labor
B) work standard
C) work-sample index
D) level of effort measurement

Question 73

Globalization of business leads to ________.

A) increase in cost of production
B) lower profit margins
C) high pricing power for companies
D) more choices for customers

Question 74

________ occur when a firm gets more experienced at making a product and develops greater insight about how to do the task more efficiently.

A) Learning effects
B) Economies of scale
C) Work standards
D) Capacity expansions

Question 75

A group of 30 students attends a particular class for a predetermined amount of time and gain knowledge inputs.This is an example of which of the following?

A) learning effects
B) small batch processes
C) job shops
D) assembly-line processes

Question 76

Cars,computers,and cameras are all examples of products that are typically made via ________.

A) job shop processes
B) small batch processes
C) assembly-line processes
D) continuous flow processes

Question 77

Which of the following production processes is the most flexible?

A) job shop
B) small batch
C) assembly line
D) continuous flow

Question 78

In a ________,automation of a production line is achieved by controlling and guiding all machinery with computers.

A) continuous process system (CPS)
B) flexible manufacturing system (FMS)
C) manufacturing monitoring system (MMS)
D) manufacturing integration system (MIS)

Question 79

Which of the following is true of work sampling methods?

A) They work best with repetitive, well-defined jobs.
B) They are more accurate than time and motion studies.
C) They cannot identify areas that require improvement.
D) They use observation sheets and trained observers.

Question 80

________ involves sampling the activities performed by an employee or group of employees at random times throughout a work shift.

A) Work sampling
B) Random sampling
C) Productivity analysis
D) Studying time and motion